Earnings before interest, taxes, depreciation and amortization in the three months ended Dec. 31, rose to 185.2 million euros ($251.6 million) from 164.5 million euros a year earlier, the Unterfoehring-based company said today in a statement. Ten analysts surveyed by Bloomberg had estimated an average Ebitda of 183.4 million euros.
“The results were bang in line with our expectations and now we need to see more of the same with broadband subscribers going up quarter on quarter,” said Andrew Hogley, an analyst at Execution Noble. Hogley has a buy recommendation and a target of 44 euros for the stock.
German cable operators are gaining sales as consumers seek digital TV service. The industry is also catching up with European peers in selling so-called triple-play products, which combine phone, TV and Internet access. Kabel Deutschland said in the quarter, the number of devices getting new premium TV, Internet and phone services rose 24 percent from a year earlier.
The shares fell 1.5 percent at 38.67 euros as of 11:22 a.m. in Frankfurt trading. The stock has risen 73 percent since its listing on the stock exchange in March last year and reached a high of 40.8 euros on Feb. 18.
Premium TV Trend
“The trend towards premium TV services is gaining momentum, and demand for high-performance Internet and phone products remains strong,” Chief Executive Officer Adrian von Hammerstein said in the statement.
Kabel Deutschland posted a net loss of 36.06 million euros compared with a profit of 4.1 million euros a year earlier. Sales rose 7 percent to 405.3 million euros. Average revenue per user increased 8.3 percent to 13.32 euros, helped by an increasing number of devices in homes being connected to cable services.
The company had 47 million euros in non-recurring expenses for refinancing corporate bonds. It predicted about 50 million euros in annual interest savings in the next financial year as a result of refinancing.
The company reiterated a forecast from June that revenue in the year ending March 31 will rise by 6.5 percent to 7 percent. It said Ebitda will be 720 million euros to 725 million euros, compared with its previously predicted range of 715 million euros to 725 million euros.
Execution Noble’s Hogley said the market is anxious to see what happens with German cable company Kabel Baden-Wuerttemberg GmbH & Co KG., which owner EQT Partners is considering selling or listing in an initial public offering.
Providence Equity Partners, Kabel Deutschland’s biggest shareholder, and Liberty Global Inc., the U.S. owner of second- ranked German competitor Unitymedia, both said on Feb. 16 that there were looking at Kabel BW, Germany’s third-largest cable operator.
“Strategically it would make sense” for Kabel Deutschland to buy Kabel BW, said Hogley. “They could learn from the marketing success that Kabel BW has had in its region.” He said it could be a stretch for Kabel Deutschland to finance such an acquisition, and that it would lift the debt level “back to where it was” before Kabel Deutschland became a publicly listed company.
Kabel Deutschland said today it reduced net debt by 136 million euros to 2.9 billion euros in the 12 months to Dec. 31.
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